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Short-time work/Questions and Answers

Enclosed please find the latest release by the Federal Ministry of Labour and Social Affairs dated May 1, 2020 on short-time work.

This information does include the intended changes by the draft law on the implementation of tax aid measures to overcome the corona crisis (so-called "Corona Tax Aid Act") adopted by the Federal Cabinet on May 6, 2020.  

Accordingly, additional payments by employers to the short-time working allowance made between 1 March 2020 and 31 December 2020 will remain tax-free. This tax exemption is subject to the condition that the top-up amount and short-time working compensation together do not exceed 80 percent of the lost pay. If more is paid, only the portion exceeding this amount is taxable.

The above tax relief is not applicable yet (May 6, 2020). However, the draft bill for the Corona Tax Assistance Act is to be submitted to the Bundestag as early as next week.

Please do not hesitate to contact for any questions.

Björn Christian Gerow

Steuerberater

Fachberater IStR

b.c.gerow@egsz.de

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